TMI Blog2015 (2) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... ken on the conveyor belts at the time of their clearances, is clear from the allegations made in the show-cause notice. - The Notice treat broken and worn out conveyor belts as waste and scrap which are sold by them in the market without payment of Central Excise duty. As such, it is clear from the above that the conveyor belts are cleared as used and worn out conveyor belts without converting the same into waste and scrap. A specific contention stands taken by the learned advocate that the appellant might treat the said old and used conveyor belts as waste for them but the same may be used by the buyers, after some reprocessing etc. as conveyor belts only, in which case it cannot be held that it is waste and scrap falling under Chapter 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the merits of the case. As such, the appellant was advised to move an application before the Member(Judicial) to express her opinion on both the issues. It is in this background that the matter was heard afresh by me, as regards the merits of the case. 3. The detailed factual position stands mentioned in the order recorded by the learned Member(Technical). As is seen, the dispute is as to whether the used and old conveyor belts removed by the appellant as waste and scrap, are required to discharge its duty liability in terms of the provisions of Rule 57S(2)(C). The said rule reads as where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap . There can be no dispute about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said conveyor belts was undertaken by them. As is seen from the HSN Explanatory notes reproduced in the order of the learned Member(Technical), the waste and scrap arising out of worn out rubber articles would fall under the said headings only when certain further processes are taken up on the said worn out goods, by way of cutting, slitting etc. Inasmuch as in the present case, there is no evidence to reflect that the appellant had undertaken the said processes of cutting or slitting of the conveyor belts into rubber pieces, the tariff entry under Chapter heading 40.04 would not become applicable. Merely because of the repeated use of the conveyor belts, which were originally falling under heading 84.28, the conveyor belts would not sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontemplated by Section 2(f) of the Central Excise Act, 1944. 8. Further I find that the Tribunal in the case of Mysore Cements Ltd. Vs. CCE, Bangalore [2004(165) ELT 307 (Tri. Bang.)] has held that the sale of old used material i.e. fire bricks and conveyor belts, furnace oil waste etc. would not attract any duty of excise. The said decision was arrived at by the Tribunal by relying upon the earlier decision of the Tribunal in the case of Hindustan Petroleum Corporation Ltd. Vs. CCE, Visakhapatnam [2002(144) ELT 555 ] as also the Tribunal decision in the case of CCE Vs. West Coast Industrial Gases Ltd. [1999(108) ELT 383 (Tri.)] and the confirmation of the said decision by the Hon ble Supreme Court reported as CCE Vs. West Coast Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 57S(2)(C) were in the statutory book. As the said decision specifically deals with the conveyor belts and as the said decision stands upheld by the Hon ble High Court of Karnataka, I am of the view, that the sale of old and use conveyor belts would not attract any further levy of duty under Chapter 40. 9. I have already observed that the old and used rubber goods would fall under Chapter 40 only when they are converted into waste and scrap before their removal. Merely on account of repeated use, old and used conveyor belts would not be shifted to Chapter 40, from their maiden classification under Chapter 84. The fact that no processing was undertaken on the conveyor belts at the time of their clearances, is clear from the allega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In the absence of any evidence to show that the conveyor belts were not used as conveyor belts, in my view the shifting of the classification of the same to Chapter 40 so as to hold that such goods would be leviable to duty of excise under the said chapter heading is not proper. This also answers the Revenue s plea that Chapter 40.04 also takes into ambits the goods of rubber definitely not usable as such because of cutting up, wear and other reasons . Learned DR had pleaded that even if the said conveyor belts of rubber have not undergone any further process by cutting etc., if they do not remain usable as such on account of any other reason, even then such goods would be classifiable under Chapter 40. Before examining the expression ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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